Clear Terms in Bill of Lading Control Liability for Goods Stolen in Shipment

Description

Shipper signed a bill of lading limiting damages in a shipment to $10,000. Over $1 million worth of goods were stolen in shipment. The trial court dismissed suit by shipper, noting that the terms of liability in the bill of lading were clear.

Topic

Sales

Key Words

Bill of Lading; Shipment; Liability; Carmack Amendment

C A S E
S U M M A R Y

Facts

BE Logistics agreed to accept and deliver shipments from California to MA Labs’ Miami destination. BE uses teams of two drivers who are under instructions not to leave any doors unlocked or equipment unattended. MA could choose one of three options for insurance coverage in case of damage. It signed a bill of lading that limited BE’s liability to $10,000. During a shipment, good were transferred from BE to a sub-contractor, CTS. The cargo was left unlocked and unattended by CTS and goods worth more than $1 million were stolen. MA and its insurer sued, objecting to BE’s limitation of liability clause, contending that: (1) the bill of lading’s terms are ambiguous and therefore inapplicable; and (2) BE materially deviated from the terms of the service agreement. MA does not allege that BE’s liability limitation clause is unreasonable under the Carmack Amendment, which is part of the Interstate Commerce Act. BE moved to dismiss the suit.

Decision

Motion granted. The Carmack Amendment to the Interstate Commerce Act establishes a national liability policy for interstate carriers, and preempts all state and federal common law claims. That law focuses on the bill of lading, but allows parties to agree to other terms of carriage. Neither of MA’s claims apply to this bill of lading so as to bar BE’s reliance on the limitation exception. BE’s liability was limited to $10,000 declared value on the face of the bill of lading. An experienced shipper cannot avoid a limitation of liability based on a misunderstanding regarding the bill of lading. The bill of lading’s terms were not ambiguous, so as to make terms inapplicable as to carrier’s limitation of liability in action by shipper’s insurer against the carrier. The material deviation doctrine, which could hold the carrier liable despite the terms of the bill of lading, did not apply as there was no evidence of separate, risk-related promise between shipper and carrier.